Paper · 1994 · advanced level
Is Inequality Harmful for Growth?
Torsten Persson, Guido Tabellini
- Venue
- American Economic Review, 84(3), 600–621
- Link
- not available
Citation count not independently verified
We only publish a number when we have checked it ourselves. None was confirmed for this work at the last review.
Contested finding
Same caveat as Alesina & Rodrik — sign of the relationship is not settled in the broader literature.
In plain language
Finds a negative relationship between inequality and subsequent growth in historical and postwar data, but only in democracies — where distributional conflict actually shapes policy.
Technical summary
Redistributive taxation reduces investment incentives; the negative inequality-growth relationship holds in historical panel data and postwar cross-sections, conditional on democratic political systems.
Key takeaways
- Companion result to Alesina & Rodrik (1994) via a different mechanism (investment disincentives from redistributive tax).
Themes
Related works
- Distributive Politics and Economic Growth — Alberto Alesina & Dani Rodrik, 1994